XRP Leads Crypto Profit Taking Despite Market Optimism

XRP remains at the forefront of investor discussions as the cryptocurrency experiences notable profit taking, even amid a broadly optimistic sentiment across digital asset markets. Alongside Solana (SOL), XRP saw a decline on Friday, with both tokens retracing gains achieved earlier in the week.

Bitcoin (BTC) hovered around the $107,000 mark as profit taking hit major altcoins. XRP led the downturn among top cryptocurrencies, recording a drop of over 4%, while Solana fell nearly 3%, reapproaching its support level near $140. Other prominent assets such as Binance’s BNB, Dogecoin (DOGE), Cardano (ADA), and Ethereum (ETH) also slipped slightly, each posting losses under 2%.

Despite these brief market corrections, overall investor sentiment remains firmly bullish. Analysts attribute the slight pullback to natural short-term adjustments following a period of strong upward momentum, propelled by improving macroeconomic factors. Recent U.S. inflation data has shown continued deceleration, which has eased market fears and boosted investor confidence in risk assets like cryptocurrencies.

Jeff Mei, the Chief Operating Officer at crypto exchange BTSE, noted in a statement to CoinDesk that BTC is in a strong position to challenge and potentially exceed its previous all-time high of approximately $112,000. Mei pointed to the de-escalation of geopolitical strains, particularly between Iran and Israel, and the softening macro environment as key factors that could push crypto markets even higher.

“Easing inflation concerns and the possible reduction of trade tariffs are intensifying pressure on Federal Reserve Chairman Jerome Powell to act,” Mei added. He speculated that Powell could either lower interest rates in the near term or even face early replacement — both developments that could lift financial markets further.

The improving market narrative is also being reflected in traditional finance. The S&P 500 recently reached a new record high, and crypto ETFs continue to attract significant inflows. This surge in institutional engagement is driving long-term optimism within the digital asset sector.

In parallel, the global regulatory landscape for cryptocurrencies continues to shift, particularly in Asia. The Trump administration is reportedly eyeing a reduction in proposed trade tariffs — a move that, if implemented, could ease domestic inflationary pressures and further encourage economic growth.

From an Asian policy perspective, new regulatory developments in Hong Kong are reinforcing bullish sentiment. Eugene Cheung, Chief Commercial Officer at OSL, highlighted how expanding ETF inflows and greater regulatory clarity are bolstering investor confidence. “Hong Kong’s regulatory measures under Policy Statement 2.0 have the potential to unlock tokenization of real-world assets and establish licensing for stablecoins,” said Cheung. “These policies represent a stark contrast to the fragmented regulatory environment in the United States.”

Released earlier this week, Hong Kong’s Policy Statement 2.0 outlines structured guidelines that support the region’s vision of becoming a leading digital asset hub in Asia. It sets clear directions for tokenization platforms, stablecoin issuers, and exchanges to operate within a well-defined licensing ecosystem, signaling a progressive stance toward crypto innovation.

This enhanced regulatory clarity is expected to attract institutional players and further legitimize digital assets in global financial systems. While some cryptocurrencies like XRP have temporarily retraced due to profit taking, broader market indicators and regulatory shifts suggest that the long-term trajectory for digital assets, particularly high-profile tokens, remains strong.

Related: Expert Advice: Sell XRP If You’re Confused

For continued coverage on crypto regulations and market developments, read more: Hong Kong Sets Out Plan to Regulate Crypto, Encourage Tokenization